The Vietnamese Ministry of Finance and the French Development Agency (AFD) have signed a financing agreement for a 100 million euro ($135 million) loan to be used for a public investment reform program.

An AFD press release said the budget support aims to help the government finance its economic recovery plan accompanied by reforms to improve efficiency and transparency of public investment.

Signatories to the on March 29, 2010 agreement were Tran Xuan Ha, Vice-Minister of Finance and Jean-FranÃ§ois Girault, Ambassador of France. The loan is part of a co-financing deal with the World Bank. The financing agreement for the contribution of the World Bank, worth US$500 million in concessional loans, was signed between the bank and Vietnam's central bank late last year.

The two-year public investment reform program aims to improve project preparation, assessment of environmental and social impacts, reform public contracts, promote competition and transparency in the projects' implementation, reduce fiduciary risk and conflicts of interest and improve regulations towards making them conducive to private participation in infrastructure financing.

The second component of the program will be implemented later this year when a second contribution from the World Bank and AFD is also scheduled.